OTPP’s Jim Leech Champions Better Pensions for All

Canadian pension executive Jim Leech may be retiring, but he isn’t going quietly. Leech, who steps down as CEO of $130 billion Ontario Teachers’ Pension Plan on December 31, recently published his first book,第三根轨道：面对养老金失败. He and co-author Jacquie McNish, a writer with the地球和邮件newspaper, warn that government, business and labor must work together to redesign and expand pensions that keep the best features of defined benefit plans, which are on the decline in Canada and elsewhere. Canadian efforts to date haven’t filled the retirement income gap, notes Leech, 66. For proof that defined benefit pensions work, he can point to Toronto-based OTPP, which has posted a 10 percent average annual return since its 1990 inception.

Leech’s accessible book cites pension reforms in the Canadian province of New Brunswick, the state of Rhode Island and the Netherlands. In Canada, he writes, adopting defined contribution schemes “would replace a mandatory, efficient system with a fragmented, non-compulsory, expensive and risky savings system that would leave retirees with less income.”

Leech加入了2007年的首席执行官OTPPin 2001 to expand its private equity and infrastructure platform. He’d spent the previous 25 years in business, where he led energy company Union Energy and merchant bank Unicorp Canada. In New York on his book tour, Leech talked to Senior Writer Frances Denmark.

为什么这本书现在？

它来自我的观察，即养老金辩论以两件事为中心：一个，你必须拥有界定的福利或界定缴费计划的无果辩论。人们对中间地位不够富有想象力。二，对被认为是镀金定义的福利计划的攻击以“你有一些我没有的东西，所以我会把它们撕下来。”此外，我不确定政治家真的明白。[新的不伦瑞克总理大卫] Alward在一个平台上被选为改变所有养老金来定义缴费计划。然后他得出了没有意义的结论。

您何时意识到加拿大有退休收入安全问题？

While working on the asset side at OTPP, I was curious about the liability side. Contributions had long exceeded benefits, but in the early 2000s it switched. I was there watching the plan mature. We now pay C$5 billion ($4.7 billion) in benefits [annually] and receive C$3 billion in contributions. The biggest impact on the asset side was we had to dial back risk, taking equity from 75 percent of the portfolio down to 40 percent. At the same time, there were a lot of studies about whether the plan was sustainable. Almost from my first day as CEO, in 2007, there was a funding deficit.

How did you decide the format for your book?

We didn’t want to write an economic tome to intimidate people. We wanted to write for the educated person who is bewildered and confused. We wanted them to have an entry point into the debate. It started with looking at existing pension plans and how do we make them right. It morphed into what we propose in Canada for the [60 percent of workers] that don’t have pensions. We believe you can find models which have the benefit of a defined benefit and share the risk between employer and employee. In our chapters on New Brunswick, Rhode Island and the Netherlands, that is our conclusion.

是什么让养老金辩论如此困难？

A lot of pro-pension arguments are lost in this debate because people get carried away. People think that pension money paid out is dead money. In Canada each year, pensioners spend C$60 billion and pay C$16 billion in taxes. Another point: For every dollar paid out, 11 cents is from taxpayers, 11 cents is from employees and the balance is from investment returns. The leverage is phenomenal for the taxpayer. If you dial all that back, your social insurance cost goes up. It would come from general revenue; every dollar increase is going to cost 100 cents versus 11 cents.

What are the chances of successful pension reform?

我是一个乐观主义者。在加拿大，它正在谈论。辩论已达到新的水平。对我来说很清楚，选举将被战斗和赢得这个问题。政府颁布并建立了一个机制，汇集了养老金计划。但他们没有足够的走向。他们没有强制性或annuitation或拥有足够大的参与者池。但是要做出这些调整就不会花太多东西。

从定义的福利模型是最有效，最便宜的方式来提供财务安全的前提下，该问题正在创造以适当方式分配风险的新方法。我们的信念是投资风险应在雇主，雇员和退休人员之间分享。可以在基金的财务金额上进行有条件。改善养老金基金的另一种方法是将许多较小的资金汇集在一起​​，从规模经济中受益，并获得更多样化的投资，如房地产，私募股权和基础设施。

更多地获得更多pensions.